CUNA and the World Council of Credit Unions wrote to congressional leadership Tuesday opposing any increase in Foreign Account Tax Compliance Act (FATCA) reporting requirements on U.S.-based credit unions and banks. FATCA is designed to target non-compliance by U.S. taxpayers with foreign accounts.
“We urge you to oppose further domestic expansion of FATCA because it would increase regulatory burdens on American credit unions and banks without resulting in a single dollar of new tax revenue to the Treasury,” the letter reads, signed by CUNA President/CEO Jim Nussle and World Council President/CEO Brian Branch.
Treasury Secretary Jacob Lew has asked for new legislation to expand domestic application of FATCA, which would require U.S.-based credit unions and banks to report non-resident aliens’ account balances to the Internal Revenue Service (IRS), even when the accounts do not earn interest or dividends.
The IRS would then share this information with foreign governments, including governments hostile to the United States.
“The compliance burdens on American banks and credit unions from domestic expansion of FATCA, however, would be significant because every bank and credit union in the United States would be expected to review their accounts on a regular basis and make reports to the IRS even if they do not hold any non-resident-alien accounts,” the letter reads. “The result will be a diversion of resources at credit unions and banks that otherwise would have been used to provide loans and other financial services.”
The letter was sent to Senate Majority Leader Mitch McConnell (R-Ky.), Senate Minority Leader Harry Reid (D-Nev.), Speaker of the House Paul Ryan (R-Wis.) and House Minority Leader Nancy Pelosi (D-Calif.), as well as chairs and ranking members of House and Senate Ways and Mean, Financial Services, and Banking committees.